Fortescue Sees Iron Ore at $140/Ton in Short Term on Low Stocks

April 22 (Bloomberg) -- Fortescue Metals Group Ltd.,
Australia’s third-biggest iron ore exporter, said “very low”
ore stocks will keep the price of the steelmaking material at
$139 to $140 a metric ton in the short term.

Steel demand and production in China, the biggest consumer,
will remain balanced at about 2.1 million tons to 2.2 million
tons a day, because inventory remains relatively high even as
iron ore stocks are low, which may result in some “minor”
correction in steel output, Chief Executive Officer Neville
Power said yesterday in an interview with the Australian
Broadcasting Corp.’s ‘Inside Business’ program.

“China looks very strong going forward and we’ve got
renewed confidence in the continued industrialization and
urbanization growth in China,” he said.

China’s economy is expanding at between 7.5 percent and 8
percent a year, underpinning demand and continued growth in
China’s steel industry, Power said. Iron ore may trade between
$120 to $130 a ton in the longer term, he said.

“We will have some fluctuations around that and in the
short term I see this sort of price level of $139, $140 a ton
continuing because there are very low iron ore stocks,” Power
said.

Iron ore last traded on April 19 at $138 a ton, according
to data compiled by The Steel Index Ltd.

Fortescue shares climbed 9.9 percent to A$3.77 at the close
of Sydney trading on April 19, giving the Perth-based company a
market value of A$11.7 billion ($12 billion).